Consider a Market Where Production of the Good Is Creating

question 130

Multiple Choice

Consider a market where production of the good is creating a negative externality. In the market equilibrium, there is a deadweight loss because the:

• A) internal cost is not equal to the external cost.
• B) internal cost is not equal to the internal benefit.
• C) internal benefit is not equal to the external benefit.
• D) social cost is greater than the internal benefit.
• E) internal benefit is less than the internal cost.

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Definitions:

Unexpected High-impact Events

Rare, unpredictable occurrences that have significant and often adverse effects on businesses, economies, or societies.

Nonprogrammed Decision

Decisions made in response to situations that are unique, poorly defined, and largely unstructured, requiring specific solutions.

Unique Situation

A set of circumstances that is distinct and does not closely resemble any other situation.

Unfamiliar Problem

A challenge or issue that is not previously known or recognized by the individual or group.